Rate-setting in the Rolling market

By Mario Lupori21 Mar 2019

At RateSetter we are committed to delivering the best products for you. Whether it is investments or loans, we want to be your first choice. For this reason, we are continually seeking ways to improve our products.

One recent improvement was the simplification of our Rolling market which came into effect on 6 June. The overarching objective of this upgrade was to ensure that contracts between investors and borrowers are fully matched to term – which gives investors more control with the same level of access and is a more stable footing for the RateSetter exchange.

Prior to 6 June, your investments were matched for around a month and then re-matched. This was the way we set up the Rolling market when we launched in 2010. While this had some merits, it resulted in uncertainty and volatility. For instance, it meant that your chosen interest rate would only be secured for a short period at a time. Now, following the upgrade, your investments remain matched for the full term of the loans which gives you certainty of rate for longer.

As part of the upgrade, we chose, with simplicity in mind, to set capital repayments to reinvest at Market Rate. This reflected the preference of the majority of investors. However, since we made the upgrade, we have heard from some of you saying how much you valued the option to set your own rate for capital reinvesting in the Rolling market, just as you can in our other markets.

We agree that the choice of whether to invest at the Market Rate or to set your rate is one of the empowering features that makes RateSetter stand out as a market-leading investment product because it gives you control over the rate at which you are lending.

So, taking on board your feedback, we are reintroducing the ability to set your rate on reinvestments. This will harmonise the Rolling market with the other RateSetter markets and give you the control you have told us you want.

Update: 2 August 2018

The ability for investors to set their own rate on capital reinvestments in the Rolling market will be activated on 5 September 2018. This will also require an update to the Investor Terms, so we are providing one month’s advance notice to investors. The revised Investor Terms will be available via your August 2018 statement.

Q&A

What is reinvested capital?

Money invested in the Rolling market is matched to a borrower for the full term of their loan contract. Each month, the borrower makes payments of capital and interest back to the investor. This repaid capital is reinvested and matched to other loan contracts in the Rolling market.

What is changing?

From 5 September, investors will be able to choose whether their reinvested capital is automatically matched at the prevailing Market Rate, or at a rate they choose themselves.

What about interest received by investors in the Rolling market?

Investors will continue to have the option of automatically investing interest received from Rolling market investments at the prevailing Market Rate or at a rate they choose themselves. Alternatively, as interest is received it can be automatically sent to the Holding Account.

How will I be able to set my own rate for capital reinvested in the Rolling market?

Investors wishing to set their own rate for reinvested capital may log into their account and update their Rolling market reinvestment settings from 5 September onwards.

Are there any changes for new investments in the Rolling market?

No. The option to take the Market Rate or set your own rate for new investments will continue as now.